Finding Rent for Student Housing

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Finding Rent for Student Housing

Ethan Brown
New to Real Estate · Member since 2021 · 62 posts · 16 votes

Hi B.P.

I'm going into college soon, and I'm looking to do my first deal. I was looking to start out with a house hack (or just regular rental without me living there) near my college. Obviously, I'll be renting the place out by the room to other college students, but I'm not sure how to find how much each room would rent for. When it comes to student rentals, how do you all find how much each room would rent for?

Thank You,

Ethan Brown

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Dave PoeppelmeierBusiness Member
Realtor · Maumee, OH · Member since 2015 · 491 posts · 722 votes
5y

@Ethan Brown that's fantastic that you're thinking this far ahead! However, Student Housing is a very hands-on niche of RE. The biggest thing you have to do is find out what the culture of Student Housing is at your college. Do people stay all year or do leases typically only run 9 months? When is the Rental Season (when students are looking for houses for next year)? What does a nice house rent for? What does a piece of junk rent for? If you don't know these, you might whiff and be severely under renting your rooms or not have them filled at all. 

The other thing you need to understand quickly is how a house works. I know that sounds rudimentary and borderline insulting, but when I was in college, I had no clue how anything worked beyond turning on a light switch and opening the fridge. Your friends/roommates won't have much of an idea either. You need a basic understanding of how the mechanicals of the house work (furnace, AC, hot water tank, electrical box, etc) so you know when something isn't working right and can know when to call for help. What you don't want is a small problem turn into a big (and costly) problem. There are thousands of YouTube videos on how the house works that can help you out.

Student Housing is a fun and profitable niche to get into, and you can hold onto that house long after you graduate. Good luck!

Podcast Guest on Show #380
Keller Williams Citywide | Dave Poeppelmeier534 Reviews
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  • Joseph Medina
    Houston, TX · Member since 2021 · 72 posts · 35 votes
    5y

    @Ethan Brown, hey bud congratulations! Let me start off by saying this is a market i am considering heavily. i am waiting to see what Schools o first regarding covid.  

    first I would go to your university's website and find out how much student housing cost. (ill provide an example of this here in a sec.) 

    When you find your price you're gonna have to calculate much more vacancy like 50% (because 2 90 day semesters equals 180 and divide that 365 lands around 49.3%), because university students leave on holiday and summer breaks. 

    Now, when you're leasing get the parents to co-sign the lease (almost should be a must) that way if the student trashes your unit the parents are on the hook, or if they skip town or don't pay you can hit up moms and pops. 

    then you might want to set aside more for maintenance and stuff, kids are just harder on things than adults. Not saying they're gonna party, but just rougher. 

    then everything is the same. make sure you have rules and etc for fridge space, food, and etc. 

    Also, a major piece of advice is set aside days for laundry room use. while in the Army when i lived in the barracks there was 1 laundry room for like 100 of us. So each day of the week was assigned to a certain hall and the upstairs COULD NOT use our stuff. Also, have a hygiene clause in your lease, not everyone has the same bathing standards as you. 

    EXAMPLE

    I found a duplex near Texas A&M it was a 4x 2 each side. 

    So i went to this website https://reslife.tamu.edu/apply...

    found a random hall that kinda fit a 1 room living situation. for this example i will use fowler hall (FHR) it is roughly 3500/ semester. so, 3500/ 3 each semester is around 3/ 4 months you choose your rate. you're looking at roughly 1166/ month. 

    so now you have the university's rate. You cant charge that because housing is ON campus and that convivence is very very valuable. 

    So, what I wound up doing was i was gonna charge 900$ for 3 months for one room OR 600$ for the year, so you dont have to worry about vacancy as much! 

    4Reply
  • Forrest Williams
    Real Estate Agent · Chicagoland · Member since 2018 · 314 posts · 199 votes
    5y

    Congrats on starting college Ethan. In my opinion, house hack is the way to go. You'll learn about budgeting for repairs, what you can fix yourself, and how to manage tenants. Calculate what the mortgage on each place you're interested would be, and use that to help you budget. 

    A couple different ways to calculate rents. You can use rentometer.com, but that won't give you only student rentals. I would suggest asking upper classmen or other students how much their rent is. What are their apartments or rooms like? How far does a dollar go in your town? For your first deal, don't worry so much about maximizing income (although keep it in mind) and try to get a 3 bedroom 2 bathroom house where your two other tenants split the mortgage and you live for free. That's a good baseline to shoot for. But if one bedroom rents for $500, and your mortgage is only $900, getting an extra $100 from renting out both rooms is pretty nice! Good luck.

    1Reply
  • Ethan Brown
    OP
    New to Real Estate · Member since 2021 · 62 posts · 16 votes
    5y

    @Joseph Medina your response was great! There's so much value in it and plenty of tips that I know will save me time and money. Your examples really helps me out. I hadn't thought of offering a lower rent for a full year before; I really like that idea/strategy and will definitely make use of it. Thank you again!!

    Ethan Brown

    2Reply
  • Joseph Medina
    Houston, TX · Member since 2021 · 72 posts · 35 votes
    5y

    @Ethan Brown, no worries bud like i said i am looking at doing this myself, but i am waiting to see what universities do because of the "-VID" 

    0Reply
  • Dave PoeppelmeierBusiness Member
    Realtor · Maumee, OH · Member since 2015 · 491 posts · 722 votes
    5y

    @Ethan Brown that's fantastic that you're thinking this far ahead! However, Student Housing is a very hands-on niche of RE. The biggest thing you have to do is find out what the culture of Student Housing is at your college. Do people stay all year or do leases typically only run 9 months? When is the Rental Season (when students are looking for houses for next year)? What does a nice house rent for? What does a piece of junk rent for? If you don't know these, you might whiff and be severely under renting your rooms or not have them filled at all. 

    The other thing you need to understand quickly is how a house works. I know that sounds rudimentary and borderline insulting, but when I was in college, I had no clue how anything worked beyond turning on a light switch and opening the fridge. Your friends/roommates won't have much of an idea either. You need a basic understanding of how the mechanicals of the house work (furnace, AC, hot water tank, electrical box, etc) so you know when something isn't working right and can know when to call for help. What you don't want is a small problem turn into a big (and costly) problem. There are thousands of YouTube videos on how the house works that can help you out.

    Student Housing is a fun and profitable niche to get into, and you can hold onto that house long after you graduate. Good luck!

    Podcast Guest on Show #380
    Keller Williams Citywide | Dave Poeppelmeier534 Reviews
    WebsiteView Page
    4Reply
  • Ethan Brown
    OP
    New to Real Estate · Member since 2021 · 62 posts · 16 votes
    5y

    @Forrest Williams I agree, asking around my campus would be a great way to get a solid idea on what the rooms can rent for. I'll definitely make contact with others about that. Also, I've got an area with lots of 3 Beds 2 Baths although some are 4 Bed 2 Bath. I'll be going after those for sure! Thank you for your response; I really appreciate it!

    0Reply
  • Larry Tuch
    New to Real Estate · Tampa, FL · Member since 2020 · 9 posts · 1 vote
    5y

    That's great @Ethan Brown!  I use rentometer.com to see what average rents go for in any area, just put the address in there and how many beds, bathrooms and it will give you a good estimate.  I'd be interested to know what market you're looking at to see what kind of deals are there too.  I have 1 student housing property already but would like to get more.

    Thanks,

    Larry

    0Reply
  • Ethan Brown
    OP
    New to Real Estate · Member since 2021 · 62 posts · 16 votes
    5y

    @Dave Poeppelmeier No offense taken here! You're 100% right, I don't have a complete understanding of how homes work, so I'll be spending plenty of time on YouTube haha! I'll also need to reach out to others and find things such as when most students begin to search for housing and how long leases are; that's definitely important. I appreciate your advice and encouragement! Thank you!

    Ethan Brown

    1Reply
  • Ethan Brown
    OP
    New to Real Estate · Member since 2021 · 62 posts · 16 votes
    5y

    @Larry Tuch I'll take a look at rentometer! I'm looking in Fairfax Virginia by George Mason University. If looking to invest up here, I'd say take a look at colleges such as JMU as well; the homes are less expensive but the college is around the same price. Thank you!

    Ethan Brown

    0Reply
  • Luke G.
    Rental Property Investor · Hammond, WI · Member since 2017 · 139 posts · 217 votes
    5y

    Zumper, Craigslist, local campus newspaper will get you an idea.  Don't look at it as cost per house, student housing is a price per room gig.  I get 400$/month per room whether it's a 2 bedroom duplex or a 4 bedroom house.  

    In my personal opinion you don't need to pay attention to what they're charging on-campus, completely different ball game.  Look at what other off-campus student rentals are getting, that's the only thing that matters.

    I own 15 of these, and maybe some of the markets are different, but the fact they're going to school and may or may not be there in the summer or winterim is completely irrelevant.  My students sign 12 month leases, I haven't had a vacancy for any of my student housing units.  One market I invest in is a June-June cycle, and another is August-August with the big "push" in renting being in the fall so I have that written into all my leases they need to inform me of their intent to renew within 9 months of lease termination or I can begin marketing their unit.

    I also end leases one week before the next students come in, this gives my team enough time for turnover and can get overlooked.  I also offer an as-is move-in, some students are fine cleaning it themselves if it means they can move in a week early.  

    2Reply
  • Joseph Medina
    Houston, TX · Member since 2021 · 72 posts · 35 votes
    5y

    @Luke G., Hey bud thanks for that. can you make an entire post dedicated to this topic? Because, that was super helpful! 

    0Reply
  • Will GastonPro Member
    Rental Property Investor · Columbia, SC · Member since 2010 · 1k+ posts · 2k+ votes
    5y

    I'd recommend going to the websites of some of the larger student housing complexes in your area and finding out their rents. Price it lower than those rooms to give friends incentive to live with you instead.

    Also, don't be afraid to check out Zillow. The zip code of our college town will have a treasure trove of rental information.

    Good luck to you!

    0Reply
  • Luke G.
    Rental Property Investor · Hammond, WI · Member since 2017 · 139 posts · 217 votes
    5y

    @Joseph Medina I only own a few, I'm not an expert on the niche, my management company does a nice job and knows how to manage these.  There are tons of information on student housing in the forums.  Any specific questions feel free to ask.  Most of my portfolio is in long term boring rentals, but I like having a few of these sprinkled in which cash flow higher.

    1Reply
  • Ryan Olsen
    Investor · Reno, NV · Member since 2021 · 23 posts · 47 votes
    5y

    @Ethan Brown - I like where your mindset is at. Make sure you see this through. Keep reading - info below might be of help.

    @Joseph Medina - I have a house in College Station (Texas A&M) and was looking at 1-2 more, but market prices are exceeding rent. They can’t cash flow. My realtor said it will be a few years for things to settle out. He is a wealth of knowledge and backs everything up very detailed. If you can find the right opportunity, then jump on it quick! I imagine they are out there. But I’m not local.

    Finally, you might already be aware, but timing is critical for purchase and rent/renewal at aTm. April 1 - May 30 is the window for renting and renewing. My house (on Davidson) has only had about 8-weeks of total vacancy in 9-years. It’s 100% about the management and Mike Caldwell and his team are incredible. Absolutely incredible. He’s also the guy that designed development and was my realtor.

    Gig ‘em 👍🏻

    1Reply
  • Andrew SyriosPro Member
    Moderator
    Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
    5y

    You need to scout out units that are being rented to students and figure out what their per bedroom rent is and also, of course, compare amenities (age of house, number of bathrooms, etc.). Look for rentals near the campus and the property management companies that market them. They won't say exclusively "student housing" but it shouldn't be too hard to figure out who they are going for based on the types of properties, distance to campus and price. You just need to be very selective in the comps you use.

    Podcast Guest on Show #121
    0Reply
  • Alexander Murillo
    Real Estate Agent · St George, UT · Member since 2019 · 56 posts · 30 votes
    5y

    @Ethan Brown others have said similar things, but it's pretty simple. Shop for housing like any student would looking for a room and you'll get a pretty good idea right away of what the rates are. Rentometer is NOT accurate, at least in my market. Call property management companies in town and ask what student housing options they have. Look at the prices, and then take that information into your home purchase plan.

    You'll also need to get pre-approved if you're not already. Obviously I don't know your financial situation, but typically students don't make a ton of money so you'll need to know your budget before you start getting excited about potential deals.

    0Reply
  • Brett G.
    CO · Member since 2018 · 69 posts · 52 votes
    5y

    @Ethan Brown

    Zoning: Make sure the property is zoned for the number of unrelated people living together.

    Location: Proximity to campus, bars, other amenities that interest college students.

    Opportunity: Find a 3 or 4 bedroom that you can make in to a 4 or 5 bedroom. This can be the quickest way to increase rents the most.

    0Reply
  • Allen L.
    Rental Property Investor · Chicago and mainly invests in KS remotely · Member since 2018 · 360 posts · 314 votes
    5y

    Look at off-campus student rental websites, available at some if not most schools. Also look at facebook groups of the same. Lastly find a PM company that may have some experience in this field. I have owned student rentals for 4 years and it's one of the best investments. Students in my opinion are quite low fuss, pays rent on time, and reasonable compared to C area tenants.

    1Reply
  • Aaron Caminati
    Rental Property Investor · Willimantic, CT · Member since 2020 · 23 posts · 14 votes
    5y

    @Ethan Brown Great choice going with a house hack for college kids. I did the exact same thing when I started out and overall it’s been great for me.

    One of the easiest ways to find rent in college towns is to go on Facebook market place, or craigslist even, and see what people are asking for. You can obv. Call these places as well and talk to the landlord for questions if they’re open to it.

    You’ll have to decide how you want to do utilities, be it all included or additional expense. There’s a ton a little things you’ll learn along the way, but generally nothing super difficult for a first timer.

    If you have any questions feel free to shoot me a message, I have 2 houses that I’m currently renting by the room, and will be glad to give you any advise.

    0Reply
  • Evan Zeigler
    Lender · Dayton, OH · Member since 2021 · 46 posts · 20 votes
    5y

    @Joseph Medina I am currently enrolled in college renting off-campus and I have never heard of students signing leases for anything but full-year. If they go home for break or anything they’re still responsible for rent. If they’re leaving for summer or any semester for that matter, they sublet to someone else.

    I hope this helps!

    0Reply
  • Patti RobertsonBusiness Member
    Property Manager · Virginia Beach, VA · Member since 2016 · 2k+ posts · 2k+ votes
    5y

    @Ethan Brown Look at what your competition is charging.

    757-472-2547
    0Reply
  • Ethan Brown
    OP
    New to Real Estate · Member since 2021 · 62 posts · 16 votes
    5y

    @Luke G. Great post! That's all gonna help me out a lot. Thank you!

    0Reply
  • Ethan Brown
    OP
    New to Real Estate · Member since 2021 · 62 posts · 16 votes
    5y

    @Will Gaston I'll check it out and see what I can find. Thank you!

    0Reply
  • Ethan Brown
    OP
    New to Real Estate · Member since 2021 · 62 posts · 16 votes
    5y

    @Ryan Olsen 

    Got it! I'm definitely starting to see just how important timing is with these kinds of rentals as well. Thank you!! 

    0Reply
  • Ethan Brown
    OP
    New to Real Estate · Member since 2021 · 62 posts · 16 votes
    5y

    @Andrew Syrios 

    I'll definitely get on it. Thank you!

    1Reply
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